Unlike our Western counterparts, long lasting family businesses are very few in between. It is quite difficult to find companies who have lasted after their founders pass away and this seems to the prevalent trend in Africa.

As discussed in our last post, generational wealth is simply creating sustainable wealth for future generations.

In a 2014 publication, Mfonobong Nsehe, A contributor for Forbes magazine highlighted the top ten family businesses in Africa. To get this data, he said he assembled a panel of 8 judges from across Africa to help identify African companies with annual revenues of $50 million or more, where the share capital controlled by the family members is in at least its second generation and the family controls at least 30% of the company’s equity and voting rights. Amongst these families, two Nigerian family were included; the Dantatas and the Ibrus.

The Dantata empire was founded in 1910 by Alhassan Dantata and traded in various agricultural products which upon his death was passed down to his four sons who have all died except the youngest, Aminu Dantata who is old now and has passed on the mantle to his son, Tajudeen Aminu Dantata and the company cops an annual revenue of more than $300 million dollars. The same can be said of the Ibru Organisation, whose patriarch Olorogun Michael Ibru started the Fish trading company which he handed over to his son, Oskar.

Despite these recorded successes, it is still glaringly obvious that the ratio of successful African family businesses to the Western side is at a great disadvantage. For example, M.K.O Abiola was lauded to be amongst the wealthiest men in Africa in the 90’s but upon his death in 1998, his chain of businesses seemed to have died alongside with him even though he had plenty children who could have carried on the business mandate.

Craig Steven-Jennings, a KPMG partner, may have given a reason for this. He noted in a 2013 article titled ‘Success and Sustainability in African Business’ that the prevalent problems found was based on succession plans and shaky government policies. He says

“Africa-specific obstacles can be external (related to governance of a country, corruption and the economic environment) or internal (such as family relationships and dynamics). The economic environment can play a major role in the success or failure of a family business. Succession continues to be a major concern for the survival of family businesses. Businesses want to be able to plan ahead and government policy needs to be executed in a stable environment in which there are clearly defined fiscal and monetary policies for the foreseeable future. When this doesn’t happen, succession planning is made all the more challenging. Succession concerns can also be a result of internal issues. Start-up family businesses tend to be myopic when it comes to corporate governance. The owners have started the business and intend to stay at the helm or eventually pass control to their children. This is not always the best solution for the continued success of the business as second generation owners may lack the skill, ability or interest to take on their parents’ projects. In addition, family tensions can affect the smooth operation of a business on a daily basis.”

This seems to be the case of M.K.O Abiola, because, his children made a claim that the Nigeria government had seized their father’s businesses worth $300 million and had practically made them immobile with government bureaucracies and legal restrictions.

An African family seems to have conquered this problem though, the Madhvani Family (Indian immigrants) of the Kakira Sugar Works Company have transformed from just a sugar factory to a multi-million conglomerate with the patriarch Muljibhai training his children in the business. Presently the CEO is Mayur Madvhani who has diversified into different interests that earn more for his company, in the spirit of tradition, his daughter is being trained to take over. And despite the Idi-Amin Asian ban that forced them out of Uganda, they came back in 1979 to reclaim their businesses, the company was recorded to have a net worth of $500 million as at January 2012.

Another key factor is the fact that most of these companies that have survived have all at one point diversified into other areas rather than solely focusing on the original product. They have also embraced technology and the introduction of ‘fresh blood’ into the company revives the company’s profit-making.

The transfer of generational wealth in Africa may be a slow trend but it is surely and steadily gaining ground in the financial world.


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